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PHOENIX-In-store services including grooming, doggie day camp and its PetsHotel business pushed profits up 23% in the second quarter for PetsMart Inc., making the pet product retailer the top dog among its competitors.

The nation’s largest pet supplies and service retailer earned $35.7 million, or 24 cents per share, during the quarter ending July 31, up from $29 million, or 19 cents per share, over the same quarter a year earlier. Analysts had predicted per share earnings of 22 cents on revenue of $905 million.

Sales at the 757-store chain were also strong, increasing 11.6% to $899 million during the period. Same-store sales grew 4.2%, compared with 5.4% in the second quarter of fiscal 2004.

“We overachieved in the bottom line,” Philip Francis, the company’s CEO, told analysts and investors in a conference call Wednesday. Francis said the firm’s pet-service business has kept the company competitive and developed brand loyalty among its customers.

But despite those solid numbers, Francis said he remains “relatively cautious about the prospects for the overall economy and the outlook for retail during the remainder of the year.”

To keep competitive, the Phoenix-based company will launch a new marketing campaign Sept. 7 that will emphasize the “Smart” in its brand logo. The company said it hopes that change will make customers think of PetsMart as more than just a pet-supply store.

Francis said the image boosting marketing campaign is expected to increase customer traffic and sales, both of which have declined in July and August as a result of increased gas prices and rising interest rates.

Despite those factors, PetsMart said it plans to open 39 new stores in the next quarter, following on the second quarter opening of three PetHotels and the addition of doggie day camps to three existing stores.

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